Subject Code: 209

Basics of e-Business and Decision Support Systems

by Prof. Yogendra Jagtap
yogendra.jagtap@gmail.com

Topic II

Understanding Systems from a Business View Point

The Work System Framework

A useful way of thinking about information systems and their relationship to customers and participants from the perspective of a business professional. A work system is a system that produces products for internal and external customers through a business process performed by human participants with the help of information technology. An information system is a particular type of work system that uses information technology to capture transmit store, retrieve, manipulate, or display information, thereby supporting one or more other work systems.
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The Work System Framework

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The Need for Frameworks and Models

Framework = a brief set of ideas & assumptions for thinking about a particular issue Model = a useful representation of some aspect of reality
Typically based on a frameworks Emphasize some features of reality, while ignoring others
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A Classification of Models
Iconic Models Analog Models Mathematical Models Mental Models

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Iconic and Analog Models

Iconic (scale) models - the least abstract model, is a physical replica of a system, usually based on a different scale from the original. Iconic models can scale in two or three dimensions. Analog Models - Does not look like the real system, but behaves like it. Usually two-dimensional charts or diagrams. Examples: organizational charts depict structure, authority, and responsibility relationships; maps where different colors represent water or mountains; stock market charts; blueprints of a machine; speedometer; thermometer
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Mathematical Models
Mathematical (quantitative) models - the complexity of relationships sometimes can not be represented iconically or analogically, or such representations may be cumbersome or time consuming. A more abstract model is built with mathematics. Note: recent advances in computer graphics use iconic and analog models to complement mathematical modeling. Visual simulation combines the three types of models.

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Mental Models
People often use a behavioral mental model. A mental model is an unworded description of how people think about a situation. The model can use the beliefs, assumptions, relationships, and flows of work as perceived by an individual. Mental models are a conceptual, internal representation, used to generate descriptions of problem structure, and make future predications of future related variables. Support for mental models are an important aspect of Executive Information Systems. We will discuss this in depth later. 9 Basics of e-Business and DSS Yogendra Jagtap

Examples of Models

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The Work System Framework

The Work System Framework

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Elements of the Work System Framework:

The internal or external customers of the business process The products or services generated by the work system. The steps in the business process. The participants in the business process. The information the business process uses or creates. The technology the business process uses. Context = organizational, competitive, technical, and regulatory realm within which work system operates. Infrastructure = shared human or technical resources the work system relies on (even those resources may be managed outside the work system).
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The system actually performing the work

Business process Participants Information Technology

Outputs:
Products & services used by the customers

External factors
Infrastructure Context
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The business process is at the core of the work system

The same process can be performed with drastically different results depending on
Who does the work What information & technology is being used

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Balance Between the Elements of a Work System

The work system elements must be in balance A change in one element usually requires a change in other elements
Well-intended changes may also have negative impacts

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Viewing Information Systems and Projects as Work Systems

Information system = a work system devoted to capturing, transmitting, storing, retrieving, manipulating, and displaying information
Software products (e.g. Oracle, Excel) are NOT information systems

Project = a work system that is designed to produce a particular product and then go out of existence
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Work System Principles

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Work Systems Principles

Please the customers (customers, products & services) Perform the work efficiently (business processes) Serve the participants Create Value from information Minimize effort consumed by technology Deploy infrastructure as a genuine resource Minimize unintended impacts and conflicts (context)
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Information System vs. Work Systems

Bar code scanners and computers identify the items sold and calculate the bill Work system supported by the information system: Performing customer checkout Aspects of the work system not included in the information system: Establishing personal contact with customers, putting the groceries in bags University registration system permits students to sign up for specific class sections Work system supported by the information system: Registering for classes Aspects of the work system not included in the information system: Deciding which classes to take and which sections to sign up for in order to have a good weekly schedule Word Processing system used for typing and revising chapters Work system supported by the information system: Writing a book Aspects of the work system not included in the information system: Deciding what to say in the book and how to say it

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Information System vs. Work Systems

Interactive system top managers use to monitor their organizations performance
Work system supported by the information system: Keeping track of organizational performance Aspects of the work system not included in the information system: Talking to people to understand their views about what is happening

System that identifies people by scanning and analyzing voice prints

Work system supported by the information system: Preventing unauthorized access to restricted areas Aspects of the work system not included in the information system: Human guards, cameras, and other security measures

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Relationships Between Work Systems and Information Systems

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Reality Check:
Identify some situations in which you have encountered information systems that support other work systems. Describe the areas of overlap and non-overlap between information systems and the work system.

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Need for a Balanced View of a System

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Need for a Balanced View of a System

Focus on Business Results Emphasize the customers satisfaction with whatever is being produced along with concern for the efficiency of the business process. Focus on People and Organization Emphasize the work environment, job satisfaction, and whether the organization is operating smoothly. Focus on Technology and Organization Emphasize the processing of information in databases, transmission of information, and whether the technology is operating efficiently and effectively.
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Need for a Balanced View of a System contd

Each of the three viewpoints is essential, but an excessive emphasis on any of them may lead to problems The importance of the ongoing collaboration between business and IT professionals. IT professionals may tend to look at the third viewpoint. It is important that business professionals make sure the first two perspectives are not lost.
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Caution: Excessive Emphasis on

Business Results can lead to superficial analysis of organizational and technical capabilities and wishful thinking of the power of technology. People and Organization can generate too much concern on how people are getting along and not enough on business results and whether technology and information are adequate. Technology and Information can sometimes generate technology solutions to minor problems and have little impact on business results or internal operations.
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The Principle-based Systems Analysis Method

One of the possible ways to analyze a work system

The General Idea of Systems Analysis

Can be applied to the system as a whole and to its subsystems Iterative process Shortcoming: no guidelines as to what has to be done at each step
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Organizing the Analysis around the Work System Principles

The principle-based systems analysis TM (PBSA)
A practical approach for analyzing systems at various levels of detail Combines the general system analysis concepts with the work system framework Converts the four steps of system analysis into three steps
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Defining the Problem & the Work System

The scope of the work system is not fixed
Tradeoff between a too broad or too narrow a scope Work system snapshot a tabular summary of the main aspects of the work system

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Identify constraints and priorities

Constraints = limitations that render certain options unfeasible
Ex.: budgetary limits. Existing technology standards, etc.

Priorities = statements about the relative importance of various goals

A small number of high priority issues should remain the primary focus
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Explore the Situation & Search for Possible Improvements

Each principle is used in turn to focus on a different part of the work system Problems that were not included in the original problem definition may be uncovered Some potentially beneficial changes may negatively impact other parts of the system
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Address the Problem While Supporting the Existing Priorities

The recommendation:
What Should you do? Clearly stated decision criteria to resolve the tradeoffs and uncertainties related to constraints, priorities, and implementation capabilities
Tradeoffs: conflicting needs of work systems, performance vs. price, technical purity vs. business requirements, etc. Uncertainties: direction of future technology, what is best for the company, etc.

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Complete recommendations may include:

Recommended changes in work systems elements. Clarification of work system vs. information systems changes. Explanation of how proposed improvements will address important parts of the problem. Justification in terms of organizational priorities and feasibility Identification of meaningful alternatives Timelines and required resources Tentative project plan and deliverables
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Applying PBSA to Work Systems, Information Systems, and Projects

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Limitations & Pitfalls of PBSA

Compromise between complexity and completeness Works well when the business process consists of identifiable steps that produce a recognizable output Does not work so well when applied to activities such as management or communication
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The Work System Framework

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Common Systems Analysis Pitfalls Related to Elements of the Work System Framework

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Common Pitfalls Work System Elements

Customer
ignore customer and the fact that the customer should evaluate the product. Treating managers as customers even though they dont use the product directly.

Product
forget that the purpose is to produce a product or service for a customer. Forget that the product of a work system is often not the product of the organization. Basics of e-Business and DSS Yogendra Jagtap

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Common Pitfalls
Business Process
Define process so narrowly that improvement is of little consequence. Define process to widely that it is too complex. Confuse business process measures(consistency and productivity) with product measures (cost to the customer and quality perceived by customer). Think of business process as theory and ignore its support by participants, information, and technology

Participants
ignore incentives and other pressures focus on users rather than participants. 41 Basics of e-Business and DSS Yogendra Jagtap

Common Pitfalls
Information
assume better information generates better results. Ignoring the importance of soft information not captured by formal systems.

Technology
Believing that the technology is the system. assume better technology generates better results. Focus on the technology without thinking about whether it makes a difference in the work system.

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Common Pitfalls
Context
Ignoring context issue such as organizational culture and politics, organizational policies, the competitive environment, and government and industry standards and regulations. Ignoring non-participant stakeholders.

Infrastructure
Ignoring possible failures in technical infrastructure (what happens when the Internet is down?) Ignoring the need for human infrastructure to keep the work system in operation (Who does on-going training of new staff).

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Measuring Work System Performance

System architecture = the systems main components, how they are linked, and how they operate together System performance = how well the system, its components, and its products operate

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Typical Performance Variables

Customer satisfaction Quality Accessibility Presentation Security Cost Quality Responsiveness Reliability Conformance to standards and regulations Cycle Time Down time Security Functional Capabilities Ease of Use Cost of Ownership Compatibility Maintainability Basics of e-Business and DSS Yogendra Jagtap

Activity Rate Output rate Consistency Productivity Skills Involvement Commitment 46 Job satisfaction

Some important issues to keep in mind:

Separately evaluate the performance of different elements, because improvements in one area may not be beneficial in others More is not always better
For some performance variables (e.g., customer satisfaction) more is better For others, such as consistency, rapid delivery, etc., more is often not better
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Efficiency vs. effectiveness EFFICIENCY involves doing things the right way
An internal

view Focus on how well resources are being used to produce the outputs
Ex.: productivity, cycle time, etc.

EFFECTIVENESS involves doing the right things An external view Focus on improving customer satisfaction
Ex.: cost, quality, responsiveness, etc. 48 Basics of e-Business and DSS Yogendra Jagtap

Performance Variables
Performance variables can be described or measured at different levels of clarity. Quality experts are adamant that careful performance measurement is essential for process improvement. Note differences between vague description and measurements.
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Comparing Vague Descriptions, Measurements, and Interpretations

ACCURACY OF INFORMATION Vague description: The information doesnt seem very accurate. Measurement: 97.5% of the readings are correct within 5%. Interpretation:This is (or is not) accurate enough, given the way the information will be used. SKILLS OF PARTICIPATION Vague description: The sales people are very experienced. Measurement: Every salesperson has 5 or more years of experience; 60% have more than 10 years. Interpretation:This system is (or is not) appropriate for such experienced people. CYCLE TIME OF BUSINESS PROCESS Vague description: This business process seems to take a long time. Measurement: The three major steps take an average of 1.3 days each, but the waiting time between the steps is around 5 days. Interpretation:This is (or is not) better than the average for this industry, but we can (or cannot) improve by eliminating some of the waiting time. QUALITY OF THE WORK SYSTEM OUPUT Vague description: We produce top quality frozen food, but our customers arent enthusiastic. Measurement:65% of our customers rate it average or good even though our factory defect rate is only.003% Interpretation: Our manufacturing process does (or doesnt) seem O.K., but we do (or dont) need to improve customer satisfaction.

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Important Point
Improvements in a work system can often be found by looking at relationships between architecture and performance issues. Customer satisfaction is largely determined by product performance (effectiveness). Product performance is often determined by a combination of product architecture and the internal work system performance (efficiency). Note: efficiency vs. effectiveness
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From work system architecture to customer satisfaction

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Clarifications Related to the Elements of a Work System

Internal vs. External Customers

External customers - individuals or representatives of other firms or government organizations
The reason the firm exists

Internal customers work for the firm & participate in other work system
Also important for the firm as a whole
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Multiple Customers With Different Concerns

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Transforming Customers Into Participants

Self-service work systems
Ex.: ATMs, Web sites, etc.

May be beneficial to both firm and

customers
Cost reductions Better feedback, etc.

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Products & Services

Customers evaluate the product
Several areas of product performance, such as:
Cost Perceived quality Reliability, etc.

Separate consideration of each factor helps in devising new ways to improve customer satisfaction
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Participants
The people that perform the work process Difference between work system participants and IT users
Focus on work-related aspects as opposed to the information system itself

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Data, Information, Knowledge

Data facts, images, or sounds that may or may not be pertinent or useful for a particular task Information data whose form or content are appropriate for a particular use Knowledge instincts, ideas, rules, and procedure that guide actions and decisions

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Hard and Soft Data

Hard data = clearly defined data generated by formal systems Soft data = intuitive or subjective information obtained by informal means
Often essential for understanding what really happened, or whether proposed actions might encounter resistance

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Technology
INFORMATION TECHNOLOGY = computer and communication hardware and software IT has no impact unless it is used within a business process

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Infrastructure
The shared human, informational, and technical resources on which a work system relies in order to operate
These resources exist and are managed outside the work system Ex.: a shared corporate database, a computer network, a support & training organization

The infrastructure should be operated and managed like any other work system
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Technology vs. Infrastructure

Guidelines:
Infrastructure if:
It is shared between many work systems It is owned/managed by a centralized authority Details are generally hidden from users

Not included in the infrastructure if:

Owned & controlled within the work system Its hands-on users need to understand the technical details
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Human Infrastructure
Often less noticed than the hardware & software components, but equally important Responsibilities include:
Managing the IT facilities Training Enforcing standards, etc.
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Information Infrastructure
Codified information that is shared across the company This type of high level of information sharing is still rare

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Context
The organizational, competitive, technical, and regulatory environment within which the work system operates Includes:
External stakeholders Organizational policies, practices, and culture Business pressures, etc.

May create both incentives and obstacles

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